I frequently hear that minimum wage has to pay a living wage. I wanted to test this against cost of living. I’ll use my local area first and then pick somewhere that isn’t insane (like not LA or NYC). Maybe San Antonio?

Ohio minimum wage is $11/hour. Now as unlikely as it is for someone to work 40 hours a week for 52 weeks straight, that is still going to be our benchmark because we can’t over-complicate the math. That translates, before taxes to – $440 a week and $22,880 a year. Since these are generally unskilled positions we’ll assume the worker is single no kids.

This thought experiment came from an X post saying that McDonald’s should pay a living wage. Local searches show single person apartments with utilities included are ranging from $500 – $900. I took the median in my response, but screw it, let’s look at the high end.

$900 a month is $10,800 a year. That’s gas, electric, and water (plus trash). No internet. I usually recommend Cricket for wireless which is $35/m for one line no hotspot, but digging around it looks like several providers offer unlimited or X amount of data before throttling hotspots for $40-$50 total. So we’ll hot spot from our phone. $50/m Phone/internet combined. $600 a year.

Here’s a big one, food budget. Since I feed 5 people off of $350/month, we’ll pretend our single minimum wage person is super spendy at $300/m for 1 person. That’s $3,600 a year.

What are we at so far: $15,000. The single standard deduction is $16,100 for 2026. The FICA taxes are $1,750.32. You’d owe roughly $678 in Federal Taxes, and $0 in Ohio State Taxes.

With Taxes we’ve lost $17,428.32. If you walk to work, car pool, or ride a bike. You have roughly $5,451.68 left for the year.

If you put $1,356 into a 401k or IRA there’s a 50% tax credit which wipes out the Federal tax owed. Leaving you with $4,773.68 in spending, and zero taxes owed for the year (besides FICA). Since we’re talking about McDonald’s they also match $1 for $1 up to 6% ($1,372.80) so that $1,356 is actually $2,729. And you just completed step 2 of the investing order: Meet your employer match on your 401k.

Which means you just grew your pay by 6% while zeroing out your tax burden. This leaves roughly $90 a week in “spending money”. Is this ideal? No. Did I miss any major expenses? Maybe, but I think I covered most things. Having a roommate could halve that rent cost. It is do-able with investing too.

We picked San Antonio as a Major City that wasn’t LA or NY to test this same math. Texas sets its minimum wage at federal minimum of $7.25 per hour. That’s $290 a week, and $15,080 a year. FICA taxes take $1,153.62. There is no State Income Tax, and Federal is below the standard deduction. Take home pay is $13,926.38. It looks like it’s difficult but not impossible to find a utilities included housing in SA for $900 a month. That leaves $3,126.38 to feed yourself and get to work and do anything at all. That seems not very livable. That being said, looking at average wages at McDonald’s in San Antonio it appears $11 is actually the low end of what they pay scaling up to $20 depending on roles and location, so it is realistically pretty close to the OH numbers.

I could probably pick more examples, but I think the reality is this. Minimum wage is a starting line, not a finish line. Where you live affects the cost of everything. You can be comfortable with less money in the right place, but you should never stop trying to grow your skill sets, or learn new things. Invest in yourself and the market.

Category	Ohio ($11/hr)	San Antonio ($7.25/hr)	Notes
Gross Annual Income	$22,880	$15,080	40 hrs/wk × 52 wks
FICA Taxes (7.65%)	-$1,750	-$1,154	Employee portion only
Federal Income Tax	~-$678 (before credits)	$0 (below std deduction)	Standard deduction $16,100
State Income Tax	$0	$0 (no state tax)
Total Taxes	-$2,428	-$1,154
Rent + Utilities ($900/mo)	-$10,800	-$10,800	Your high-end estimate
Phone/Internet ($50/mo)	-$600	-$600	Hotspot combo
Food ($300/mo)	-$3,600	-$3,600	“Super spendy” single
Total Basic Expenses	-$15,000	-$15,000
Leftover After Basics	$5,452	-$1,074 (shortfall)
With $1,356 Retirement Contribution	50% tax credit → wipes fed tax; McD match (up to 6%) adds ~$1,373 → total retirement $2,729	Not feasible at min wage (but possible at real $13/hr avg)
Effective Spending Money (post-retirement/tax optimization)	$4,774 ($90/wk)	Very tight/negative at true min; better at realistic wages

~~Miniwing~~
Stoic, Investor, Parent